Pharmaceuticals giant GSK increase stake in Indian healthcare unit to 73%

UK drug maker GlaxoSmithKline Plc (LON:GSK) said today it had increased its stake in its Indian unit GlaxoSmithKline Consumer Healthcare Ltd to 72.5% from 43.2%, as part of a voluntary tender offer launched by its subsidiary GlaxoSmithKline Pte Ltd.

During the offer period, which ran from 17 January to 30 January, some 12.3m shares of the target, or 29.3% of its total stock, were validly tendered. The buyer has proposed INR3,900 (USD73.23/EUR54.15) apiece, giving the deal a value of INR48bn (USD901.2m/EUR666.7m).

HSBC Securities and Capital Markets (India) Private Limited is managing the offer, which was originally unveiled on 26 November 2012. The final payment date is on or before 13 February, GSK said.

The transaction will allow GSK to further bolster its presence in India, which it considers a key emerging market, it added.

Human Genome recommends stockholders reject GSK’s bid

US biopharmaceutical firm Human Genome Sciences (NASDAQ:HGSI), or HGS, reiterated its advice to shareholders not to tender their stock to the $13.00 (EUR10.30) a share hostile takeover offer from GlaxoSmithKline Plc (LON:GSK), after the British suitor announced an extension to 20 July of its $2.6bn worth bid.

HGS’ board said that less than 1% of the company shares had been tendered to GSK’s offer which was taken to HGS shareholders in May, after the target’s board turned it down as inadequate and not reflecting the firm’s inherent value.

GSK, whose bid was to expire on 29 June, said on Friday it had decided to extend it beyond the 16 July deadline set by HGS for final offers to be submitted as part of its strategic review, in a move to allow HGS shareholders the opportunity to compare the results of the board’s review to the hostile offer.

Reacting to that, HGS said it planned to complete its strategic review as rapidly as possible in a way that would give shareholders the chance to benefit from a complete and fair process.

The US company has invited GSK twice to take part in the review, but the British drugmaker declined both invitations, saying that its offer was not subject to due diligence or financing.

GSK is still willing to meet with HGS and review its takeover proposal at any time, it added.
The transaction offers immediate premium liquidity to HSG’ investors, while sparing them the inevitable high risk involved in HSG pursuing its future growth objectives, the buyer has explained.

It is also in line with GSK’s long-term growth strategy and would help it simplify its business model.

Goldman, Sachs & Co, Credit Suisse Securities (USA) LLC, Skadden, Arps, Slate, Meagher & Flom LLP and DLA Piper LLP (US) are serving as advisors to HGS.

GSK requests board to drop poison pill, blocking takeover of HGS

British drugmaker GlaxoSmithKline Plc (LON:GSK) said it had added as a condition to its USD13.00 (EUR10.35) a share hostile takeover offer for Human Genome Sciences (NASDAQ:HGSI) the request that the board of the US biopharmaceutical firm abandoned the poison pill adopted to block a takeover.

HGS announced on 17 May a poison pill with a 15% trigger and one-year term, to allow the company to fully focus on its strategic review process and to protect shareholders against unsolicited takeover attempts.

GSK decided to take its offer directly to shareholders after HGS’ board turned it down last month as too low.

The British group announced on May 9 it would not take part in HGS’s review of strategic alternatives as invited and would instead launch its tender offer to allow HGS shareholders the chance to appreciate the merits of the offer themselves.

The offer was kicked off on May 10 and will run until June 7, valuing the target at some USD2.6bn.

According to HGS’ board the bid fails to reflect the value inherent to the company’s assets, operations and growth opportunities, including the upside potential represented by its pipeline.

The board advised shareholders not to tender their shares to the bid which it had deemed inadequate and undervaluing the company.

GSK has said it expected the takeover to serve its growth plans which include simplifying the business model, boosting R&D returns and deploying capital in a disciplined manner.

The British buyer is advised by Lazard Ltd (NYSE:LAZ), Morgan Stanley (NYSE:MS), Cleary Gottlieb Steen & Hamilton LLP and Wachtell, Lipton, Rosen & Katz.

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HGS’ board urges shareholders not to accept “inadequate” offer from GSK

The board of US biopharmaceutical firm Human Genome Sciences (NASDAQ:HGSI), or HGS, said on Thursday it had determined that the USD13.00 (EUR10.23) a share hostile takeover offer from British drugmaker GlaxoSmithKline Plc (LON:GSK) was inadequate and undervalues the company and advised shareholders not to tender their shares to it.

GSK decided to take its offer directly to shareholders after HGS’ board turned it down last month as too low.

The British group announced on 9 May it would not take part in HGS’s review of strategic alternatives as invited and would instead launch its tender offer to allow HGS shareholders the chance to appreciate the merits of the offer themselves.

The offer was kicked off on 10 May and will run until June 7, valuing the target at some USD2.6bn.

According to HGS’ board the bid fails to reflect the value inherent to the company’s assets, operations and growth opportunities, including the upside potential represented by its pipeline.

GSK’s offer was made when HGS shares were trading near a 52-week low, taking advantage of the price dislocation to opportunistically capture for itself the significant upside potential of upcoming value-driving products, the board said further.

As there was no decision by HGS’ board to sell the company, the takeover offer should be evaluated against the firm’s long-term strategy for shareholder value creation and the prospect of other potential deals which could bring more value, the board added.

HGS also announced today a poison pill with a 15% trigger and one-year term, to allow the company to fully focus on its strategic review process and to protect shareholders against unsolicited takeover attempts.

GSK has said it expected the deal to serve its growth plans which include simplifying the business model, boosting R&D returns and deploying capital in a disciplined manner.

For more on this story, click here.

GSK goes hostile

HGS rejects GSK offer